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This is a guest post from Erica Douglass. After selling her online business for a million dollars at age 26, Erica
“temporarily retired”. She now writes an online business blog at erica.biz. This is very much an article about advanced personal finance techniques, and doesn’t necessarily reflect my own philosophy.

You’ve pulled yourself out of debt, are saving a reasonable amount of income for your retirement, have built an emergency fund, and your daily needs are easily met with your income. Congratulations! Now what?

That’s exactly where I was in 2007. I sold my business and generated a huge windfall — over a million dollars. I paid off all my debt. And then I looked around and said, “Oh, crap.”

I had absolutely no idea what to do with my money. Previously, any extra money I’d earned was immediately stuffed back into my business, and I had been running deficits nearly everywhere. This was the first time in my adult life I’d ever had my head above water, financially speaking.

Over the next three months, I proceeded to blow over $50,000. Oh, don’t get me wrong — it was fun! I bought a new car (that I still drive), some really beautiful artwork from artists I loved (that looks great on my walls), and thousands of dollars in clothes, new furniture, and other indulgences, such as $4,000 custom hand-made stereo speakers (that I’m listening to right now.)

It was fun…for a couple months. Then it got boring.

My Spiral into Depression
Like many lottery winners, I spiraled into depression. The business I had spent six years of my life building was gone. I felt adrift — like I had no purpose. Despite having been “successful”, no one knew who I was. I had marginalized most of my personal relationships in favor of growing my business and working myself to death. And money wasn’t going to buy me out of the situation.

Slowly, I pulled myself out of my depression. I realized I had the opportunity to make myself into anyone I wanted to be. I could do anything I wanted. I had complete freedom. The thought was both exhilarating and terrifying.

I bought a shelf full of self-help books and read them all, relentlessly seeking to answer the many questions I had. Some of them were philosophical, like “What made me successful when so many others have failed?” Some were practical, like “How do I invest my money?” But all of them led back to one deeper question: “What should I do to be happy?” I soon realized the latter question was incorrect. The better question was, “Who should I be to be happy?”

In December 2007, I started blogging. I exposed a significant amount of my business life and thoughts. I wrote about my successes and my mistakes and failures. I enjoyed writing, doing videos, and interacting with my readers. Helping others figure out their purpose, their businesses, and their websites and blogs was a fantastic experience.

Spending with a Purpose
I made a point of trying to achieve greater states of happiness on a daily basis. Instead of being merely content — or even apathetic — with my current state of being, I realized I could be happier daily. And suddenly it hit me: I understood what I wanted to do with my money. I wanted to outsource pretty much everything I hated doing.

In order to live a simpler, calmer, but more effective life, I had to drop the shackles of wanting to do everything myself. To allow time to meditate, think, write, and create, I had to get rid of the drudgery of daily tasks. I realized my money could serve a fantastic dual purpose: To allow others, whose passion is cooking, cleaning, or assisting in various ways to help me — while I supported them by giving them income to do what they loved.

My life fundamentally changed that day. I started hiring people to do everything I didn’t want to do. The first step was to hire a cleaning service. Then I hired a personal assistant to work out of my house, filing papers, doing laundry, and organizing. I hired virtual assistants to do all the menial tasks I hated doing: bookkeeping; video editing; audio editing; even setting up my Facebook fan page. (Lisa, my VA who set up the Facebook page for me, said happily: “I can’t believe I get paid to do this!” And I realized…we’re both lucky.)

My Daily Routine
I wake up in the morning and my VAs have sent me their updates. I am building a business where I create how-to videos for small business owners and bloggers who want to drive more traffic to their sites and get more customers.

I learned meditation, and currently spend about 40 minutes a day relaxing. I also spend a few hours a day doing the parts of my business I love, from creating videos to writing to programming. When I walk down to the kitchen, it’s clean; Elia, my housekeeper, comes in every week to make sure it’s spotless. She spends 2 hours cleaning our kitchen; total cost to me: $30.

My VA in the Philippines edits my videos and does a fantastic job for $3.33/hour.

Whenever I do an interview with another entrepreneur, I send it to another VA in the Philippines, who, for $9/hour, edits it perfectly, getting rid of all the strange pauses and “um”s. I send the edited interview off to a transcriptionist. For less than $30, I get back an excellent transcription, often 12-16 pages long.

Lisa, my VA here in the U.S., has set up an entire website and integrated it with a shopping cart for my customers to order products and access them once they have ordered. She charges $30/hour (my most expensive staff member) and she’s worth every penny.

I treat my staff members well, and they love the fact that they can work from home and get paid great wages ($3/hour in in the Philippines is equal to about a $65,000/year wage here in the U.S.) They are happy — I can see it in their emails and text chat messages.

My partner Richard and I fight less. There’s no scrapping over who will do a certain task. If no one wants to do it, we work together to figure out how to hire someone.

A Disease Opens My Eyes
I was recently diagnosed with Celiac disease. The management of the disease may sound simple, but it’s not: eliminate wheat, oats, barley and rye from your diet. Most restaurants have very
few gluten-free items; I’m lucky if I can order one non-salad item from a typical menu. Some restaurants are impossible to eat at; soy sauce, for instance, has wheat in it. I’ve gotten sick from things as odd as bacon, cake frosting, and ranch dressing.

After a few weeks of eating mostly hot dogs and tuna fish, I grew tired of my limited options. I thought about learning to cook, but it wasn’t something that excited me. So we hired a personal chef to cook our meals — one who understands the challenge of cooking gluten-free. We pay her $10/hour, including travel time to deliver the food to us, and she gets a fun side job.

In a randomly-chosen week before I hired a personal chef, I ate out four times and went to the grocery store twice. I spent a total of $179.91 on restaurants and groceries. Last week, I spent $215.49, including groceries, for eating out and paying my personal chef. My “eating out” expenses dropped from $86.14 to just $32.28 — over 60% less! My total spent was $35.58 more, but to me, that’s a small price to pay for gourmet food of my choice delivered to my door. Another remarkable and unexpected side effect was that I no longer have an urge to go out and spend money at fancy restaurants — I simply ask my chef to make what I want and deliver it to me.

It has been more than two years since I sold my business, and I am happier than I have ever been. I made different choices than most: We rent a house instead of owning (a savings of nearly $4,000/month in our neighborhood — more than our monthly rent payment!); we only have basic cable; we don’t have a landline, credit card debt, car payments, or student loans.

I chose, instead of buying more Stuff, to live a more fulfilled life. For me, even more important than holding onto my money tightly was to learn to let it go — to give it to others in exchange for work well done, and to trust that they could do tasks well. It’s one of the best decisions I’ve ever made.

Holly – “we” are aware of no such thing, unless of course you are either speaking for both you and your husband/fiend, or are the Queen.
You are correct about Erica being Un-selfish, I agree there. What’s obvious to me is that people can easily misinterpret one’s writing and attribute attitude/motive where none exists.
I know Erica only from her various posts, on her site and as a guest. I’ve gained both knowledge and time from reading her work, as well as a free eBook she offered.
You offer a personal anecdote that I find interesting, comparing Erica to the girls with rich parents. The silver spoon metaphor is nearly always used for someone who is born into wealth or inherits it. A self-made entrepreneur is anything but.
The spoiled classmates of your daughter seem to have had quite an impact on you. Try not to look at the world looking for that attitude where it may not exist.
If you manage to filter out the attitude you find in this post, you’re left with a woman who runs a business and offers employment to 3 or more people. Would you prefer those three people to have that income taken away?

To #215 & others wondering what giving money away to charity & others has to do with personal finance…I’m 55 and have given to a children’s charity since I was 18. This is in addition to money given to church and to other charities occasionally. Today I am very comfortable with little debt. I am rich by the world’s standards if not by U.S.A.’s. If I look over my financial decisions of the past 30 or 40 years, I can see mistakes. Charitable giving is not one of them. I wish I had begun saving for retirement earlier. I could have curbed my spending more. But I daresay that I spent more on ill-fitting clothes, weight loss gimmicks, unfulfilling entertainment than I ever did on charitable giving. And I have gotten more happiness from the charitable giving. Being rich is a very elastic idea; there is always someone richer. So one of the things that charitable giving does is to remind oneself of what you have rather than what you do not have. When you are content you feel richer. Plain and simple.

@JoeTaxpayer – Your last question makes it seem as if Erica has the power to take their income away. Having a job is an opportunity to work for someone else, not a necessity. Remember that currency is just a form of trade. You don’t have to work for money, you can work on your own land, or trade skills, etc. Taking their income away will not change their ability to chose a different way of receiving income. On another note, self-made millionaires and entrepreneurs can have the same silver spoon mentality. Either before, during or after their success. It’s in the attitude. And that’s what I think a lot of people here are talking about in this article. Unless it was ghost written, Erica’s words display her attitude pretty clearly.

@Marian – Well said. I’ve had a permanent charitable contribution I’ve made since I began working in my youth. I can say though, that I did start saving early. And that my whole life I’ve spent way less than I’ve earned. And because of that, I’m financially free at an incredibly early age. And I did it the “hard” way. And I think it was good for me. Because it taught me how to live, not how to spend. Now my wealth is measured not only in my net worth, but in my contribution. And that’s where we should all be focused. In how we can give, not how much we’re worth. The ironic part of that, is that the more you give, the more you receive. It’s why usually when people find ways to help others, they are rewarded by them. That’s how it started. But then it changed, people are finding lots of ways to trick people and to give them the least possible taking advantage of their situation and justifying it everyway they want. In the end, those may have a high net worth, but also a negative return on humanity.

Here is a challenge for everyone to which I live: For every dollar you spend on yourself -> Give a dollar to a humanitarian cause to which can not benefit you directly. That’s a high challenge. But you will find that you will either spend WAY less, or find a way to make more so you can spend more. Either way, you will greatly contribute back to worthy causes. What priority do you display when you spend so much on yourself and very little on others?
What if Erica paid the going USA wage instead of those few dollars/hour? That could be considered a charitable contribution, even if it’s tax credited as one (in Canada, at least, there is a difference between business tax deductions and charitable tax credits). Erica pays them that wage because she can. I never did really take a stand on this issue because it is debatable, but I can say that if she decided to up the anti (spelling?), she will begin a revolution which is not to just pay the lowest possible wage, but to also contribute back and voice that they are worth more. And then others follow, and then more. And then that country is receiving more than they need and they in turn and go and do the same… People usually get rich in two ways: Fulfilling needs or taking advantage of needs. In this aspect, not much has changed. Since the old days where you were not the landowner and the landlord always asked for just enough so you can survive, but not enough for you to go and get your own land. If you step back from this idea, you will find that if you help others become self-sufficient, they in turn can go out and do the same… and the world would change.

@Arturo – I didn’t say and didn’t mean to suggest ‘all their income.’ I said ‘that income’, i.e. the money she’s paying them.
Specifically to the Asian virtual assistants, I don’t know where you’re going suggesting they find other work. These people have educated themselves to a level where they are comfortable to do video editing, and the wage Erica is paying is far above poverty. You want these people who have acquired a good paying skill to go back to farming?
It’s a bit disingenuous to suggest she pay 10X the wage to have that work done locally when nearly everything you buy is priced low as it is due to overseas labor.
Why not first put that expectation on all the companies you deal with here before burdening a young entrepreneur with that?
What a very strange turn this discuss has taken.

@JoeTaxpayer – Sorry for the misunderstanding, but it seems like my comment still stands with your reply there. With comments like: ” I don’t know where you’re going suggesting they find other work”. I know you don’t really mean that, but it does convey the syndrome that somehow (we) “developed” countries/people hold some kind of large influence on their lifestyle. Or how about: “You want these people who have acquired a good paying skill to go back to farming?” What do you mean by that? Erica classified “mundane” work as being of lesser value to her. I think maybe this is what you are trying to convey here. The Argentian countrymen/women are becoming famous for the way they hold value to their land. Each were offered $1.1M US (or about 3.5M pesos) for their 100 acres of land. They refused. Everyone has a choice. Everyone has different values in their lives. On another one of your notes, “It’s a bit disingenuous to suggest she pay 10X the wage to have that work done locally when nearly everything you buy is priced low as it is due to overseas labor.” Again, taking advantage of others. There is a clear line between paying someone what they are actually worth to you, and what you can get them for (knowing they are worth more). You may not be able to see it the way I understand it, but you can’t honestly say that spending your money wisely includes harnessing cheap labour because that’s what everyone else is doing.
“Why not first put that expectation on all the companies you deal with here before burdening a young entrepreneur with that?” Not sure what age has to do with it. I believe it’s more about purpose. And it’s a full circle again to what I had said before. This is about where your heart is when it comes to money. This is reflected in the manner you spend your money.

Ok. You feel Erica is taking advantage of others. Do you realize that $6660/yr is more than 86% of the world survives on? Let’s stick with that for a second. The Filipino who has a skill and thanks to the internet is able to join a global market and sell that skill to an individual in the US for a wage he cannot get locally in that field doesn’t feel taken advantage of. Of course she’s only one individual, but if everyone in the US had tasks like this (i.e. things that could be done via the web) it would bid up the wages improving the recipient’s lifestyle further.
I’m trying to understand the premise of your position as well as those who seem to be against this concept. When you buy a hamburger at McDonald’s you are taking advantage of the employees there, as their wages within the US are far below average. When Erica hires an Asian VA, that wage is above average in that country. There’s a degree’s worth of economic studying to understand how the world benefits by “more” of what she’s doing, not less.

Erica’s post is a dry summary of pretty much any other affluent business owner’s daily routine that I’ve ever heard about… paying people to do jobs that she’s unwilling, unable, or uninterested in doing.

@Honey, thank you for teaching me a word, misanthropy, that summarizes my view of most of the world around me. Having followed GRS for a while and having seen several of your previous posts, I’ve generally been in complete disagreement with your views (respectfully, of course), most recently including your preference for 40% taxes if the gov’t took care of providing for those in need. Personally, I think most gov’t policy and programs meant to help people generally prevent progress overall. But I couldn’t agree more with your thoughts on providing a venue for free IUDs for folks who can’t afford them. Although, I’d argue that the world isn’t over populated – instead, there are just too many leaches who are content with laziness over actually working to improve their own conditions.

@JoeTaxpayer – It helps to start your responses in a positive note. I understand the perspective you are asking me to see it under, but I feel it’s that same ideology I’m debunking. The economical sense I hear from you and many others is the same in my opinion, the old capitalistic format. I think to believe it is perfect, is foolish. So if it is not, can it be that this one area, as an example, is where the system fails? Where the enormous gap in economy is not helpful? One could say that this creates a void to which it gets filled eventually… but the system doesn’t do it, people fill that gap by choice and action. And it requires people to take action to do it. Look ay any great change in history worth noting, and you will find as well selfless contribution to make it so. To take for granted these blessings and then oppose the very compassion that gave us what we have today, is not only inevitable folly in our part, but arrogant. My intention here originally was not to say that Erica is selfish, but rather, she could do better… much better. And it’s attitudes like hers that give that prejudice that many who are not financially independent are selfish. But I also shared how many are not selfish, and you’ll be hard pressed to find them as selfless giving is not selfless if you are inviting others to see they have done. So most of the time, you never knew it was some rich guy who helped you out. Thus, it’s good that she wrote this article. It shows the path she took to arrive where she is. It can help lots understand why people end up doing what they do.

@ mike, #261 – thanks! And I’m well aware that my political, economic, and religious views are VERY extreme and thus shared by a tiny, tiny percentage of people – but at least I have the comfort of knowing I’m right (don’t we all!)

For example, I don’t relate at all to the posters who thought that Erica was ungracious or silver-spoon-y in her tone. I thought she sounded exactly like someone I’d enjoy being around. But then again, it seems that modesty/humility is almost universally regarded as a positive character trait, whereas for me, that is one of the most unattractive character traits it is possible to possess.

I vastly prefer confidence (which is often mistaken for vanity by the insecure) – provided, of course, that confidence is based on a realistic assessment of one’s potential and accomplishments, which I think Erica’s is. For example, I adore Stephen Colbert’s character on Comedy Central, but Jon Stewart’s character gives me the willies

Arturo, I appreciate your thoughtful response. There are too many aspects of this to fully discuss them all.
Yes, I believe in capitalism. And I found the criticism launched at the outsourcing concept (aimed at Erica) to be hypocritical, in general.
From the food people eat to the clothes they wear and the electronics they buy, there’s cheap foreign labor built into the price. An average American is able to afford certain restaurants because the workers there are paid below average. Are any garments still made here? Sneakers?
As much as there’s talk of closing the Mexican boarders, has anyone calculated the cost that would come with hiring Americans to do this work?
I understand there are two ways to look at things. From where I sit, I see that the average American lives better than 99% of the rest of the world. And it prompts one question, does it help those people to buy their services or hurt them?
I’m not talking about the results of slave labor, of course that’s bad. I don’t imagine that VAs working on computers doing video, graphics, editing, writing are feeling abused. If Bill Gates offered to pay me for my time at $100/hr would you say he’s taking advantage of me or that the deal benefits us both?

@JoeTaxpayer – Very well said. As for your last question… it comes down to value… would you be happy knowing that your services is making him $1,000/hr profit? I’m asking how you would feel about it, and not if it’s right or wrong.

@Arturo – you raise good questions and do a great job framing an issue to get a point across.
In a sense, you point out a failure of capitalism, the worker doesn’t always get a fair share and those at the top often paid many hundreds of times those in the lower end make.
Part of the Gates analogy is that as a worker, my risk is far lower, I’ve little to lose. I worked fast food as a teenager and in my record shift single handedly cooked 3000 hot dogs which sold for $1 each. Minimum wage was $3/hr. So I was paid $24. Of course I thought about it, and remember it 30 years later. But jobs weren’t as plentiful as were teens on the waiting list to work. And I chose how to sell my time to keep my own life in balance.
It would be interesting to find a Filipino blogger willing to talk about the job market there and how they feel about the money coming in.

@Arturo, @JoeTaxpayer and others, Why do both of you feel the need to apologize for capitalism? I am selfish. I am proud of being selfish. I am proud that I have worked to point where I can see a successful financial future for myself. I am proud that the decisions I make are for the betterment of myself and my family. I will not work so that I can give my results away to someone who hasn’t earned them. It is only on the premise of individual rights and the capitalist system that I am able to support and better myself. To say the capitalist system has failed some and enabled others is a cop-out. If you fail you have only yourself to blame. Granted, success is not always deserved, but it is neither owed to anyone.

I reject the notion that my happiness is dependent on charitable acts. If you choose to give your wealth away that is your right and your decision. But I find it repulsive that you (Arturo) would suggest that Erica, myself, or anyone else should follow suit. Or worse, that we have an obligation or a duty to do so.

Russ, for what it’s worth, I agree with you.
My “failure of capitalism” remark to Arturo was to make a point not to suggest that was my own view. In this string of comments, I was still trying to parse out the anger I senses toward the article author. Arturo came closest to helping me understand that his objection had to do with how people hire others to their own benefit. If one can point out a flaw in someone making $200K/yr because the employer is actually benefiting from that, we are well beyond Erica, VAs, personal chefs, etc, and inditing capitalism itself.
We are approaching the ‘flat world’ the book suggests. We are at the point where for example, I can sub out a piece of work, proofreading, video editing, etc, to someone who will do it for what to them is a fair price and to me is a bargain.
There are a number of possible reactions to this:
a) acknowledgment that the world has become an amazing market place and seeing how this can apply to us.
b) discussion suggesting the employers in this case are taking advantage of the workers
c) further judgment based on the motive/results of that work.

Snapshots in time are funny things. When I walk by every Haiti collection can and say ‘no’ to every cashier trying to add a dollar to my bill, I am judged. When the crisis first hit, I became aware that an acquaintance was part of a church group that visit Haiti twice per year, and sent him a day’s pay (of mine) to help the cause as they were getting ready to provide aid. This tangent is just to point out that people are going off in many directions. Why would an article on outsourcing take a turn to discussing charity and accusing the writer of not being charitable, I bet she is.

And in a difference economic structure, workers would get a ‘fair’ cut. They could choose whether to edit a business video for that cut, or my kid’s basketball video we want to send to grandma.

@Russ and Joe
These would be sensible sentiments if the world actually were flat. Yet those of us in first world societies are able to make more and spend more because of the benefit we’ve received from living in those societies.

What are these benefits? A stable government that’s not taken over by despots/military dictators every few years. A stable legal system to enforce laws and contracts. Interstate highways. A regulatory system that works to keep drinking water, medicines, and foodstuffs safe. An education system that produces well-trained engineers, doctors, lawyers, researchers and scholars.

When we send the fruits of our labors to areas in the world that do not provide their citizens such benefits, yes we’re helping some third-worlder get by, but at the same time we’re supporting and enabling economic and governmental systems that refuse to develop their own resources, human and physical, so that their own people may prosper domestically.

It’s like sending food aid to North Korea. It makes us feel good, in the same way we rationalize that 3 bucks an hour is a living wage for a third worlder so we’re doing a good thing, but Kim Jong-Il simply seizes the shipments and distributes them on the black market or among the country’s elite, and it doesn’t get to the starving populace.

The world truly is today’s market, but there’s no need to delude ourselves that sending the wealth we’ve worked to build thanks to our stable economic, social, and political system abroad — to nations that rely on the influx of that wealth to keep from developing similar systems for their own people — is a net good.

Recognize that it’s not capitalism in a vacuum that makes us wealthy, but rather the stable economic system made possible by a government that was created to further the common good (gasp!), that enables capitalism to thrive.

@Amy, The facts you state about third-world governments are arguments for capitalism and they are the reasons why we do not owe our wealth to anyone else. The only way government can “support” capitalism is by protecting individual rights and getting out of the way. Capitalism is by definition laissez-faire. Governments that circumvent this are acting to favor the interests of some individuals over others’ which is a violation of individual rights and a corruption of capitalism. Governments that do this and populations that put up with it get what they ask for. Liberty is truly rare and I don’t think we value it as highly as we should. Liberty is the reason “fairness” in the context of capitalism is moot — you are free to engage only in the contracts that you deem to be fair and reject those you deem otherwise. Under capitalism you cannot be taken advantage of unless you willingly agree to the terms.

@Amy, Re-reading your post I think that you have hit on a point that I may have over looked. The role governments play in all of this is huge. You say that our system of government has allowed capitalism to thrive. This is true in some ways and false in others, but I would take it further and say that Capitalism is more a philosophy of politics than of economics. A government that recognizes individual rights and does not intervene in private enterprise is a capitalist government. The US is certainly a hybrid system but it is arguably the best that we have (getting progressively worse since the creation of the federal reserve).

To bring it back to outsourcing – If both parties are entering into the contract under their own free will to mutual benefit I cannot see how it would be wrong. That is exactly what has lifted this country to it’s current standard of living and it is what has to happen in order for third-world countries to be lifted out of poverty. If a counter-party’s benefit will be co-opted by a malicious government or if they are entering into it against their will then I think that would be an immoral contract. (The US government enforces its share of these I might add.)

@JoeTaxpayer – Thank you. I agree with the employee/employer concept. The more risk you take, the less security, yet larger possible gain. I did both. And in the end, my business’ did not do as well as my boring “save for financial independence” plan. As for the Haiti comment, I agree completely. Happens to me. They don’t understand however, that I don’t just give when there is great necessity. I believe it’s always there, so even my donations are budgeted. So when you get a natural disaster, we do well to be compassionate and help out. I think the way you supported your acquaintance was awesome. When I talk about humane spending or donating, that’s what I mean. Flying money there is not always the answer. Supporting the country to restructure, as @Amy says, is money well spent. Assisting for them to make their own choices towards positive growth doesn’t just feed them once, but empowers them to feed themselves. So as an example, working on a disaster plan for a possible next time, should be the follow-up donation.

@Amy – Very well said. I agree with you. And I can see in your example how you clarify that “making an actual long-term difference” and “spur of the moment to feel good”, is totally different. It may hurt more than help. It’s why planned out giving is more important.

@Russ – I’m not apologizing, but rather assessing it. Systems evolve. I said that capitalism is not perfect. Human touch is needed and maybe part of the economic system can include that by default by building it in. I really don’t know. I’m not against capitalism, but I also think that pure capitalism does not work in favour for everyone. Capitalism is just another stepping stone. It’s because it is a growth-based system, disregarding the total cost of that growth (like our environment issues, as an example). It’s goal is to cause action. It works well. It fills gaps where needed. But just like a cell in your body does the same thing, it does not necessarily mean it keeps an eye on the other cells and assist where needed. Your words declaring your selfishness emphasizes what I mean by capitalism doesn’t always look at the human aspect of business. Hence the famous words “Don’t take it personal, it’s just ‘business’”. Such a cop-out way to get what you want and justify it. But I think your views and mine differ enough that we may not agree here. Because I’m not looking necessarily as to how much someone has, but how they got it. If your financial future is successful because of the advantage you took of others’ weakness, then I would not be proud of it. Let’s not forget how certain countries became the richest countries in the world. It’s good that you want to better the situation of your family, but if you do it immorally, I believe it’s safe to say that you will end up doing the opposite of what you hoped, even with a ton of cash in your hands. What good is it if you gained the whole world but yet lose your soul? Your last paragraph, in my opinion, clearly re-states your proud selfish nature. It’s no wonder you find the notion of charity=happiness repulsive. I find it to be an opportunity for you to ask why you find it repulsive. So why do you? Consider the fact that somehow, someone, somewhere… charitable acts have not only helped you, but changed the facet of your life for the better. But you may not fully appreciate this concept of returning the favour… with a selfish attitude.

@Investor Junkie – Good article. I agree with much of what you say. I think you agree then that it is not perfect, but the best we have right now. The question I raise is best for whom, and best in what way? Just meeting our needs is not sufficient to live a happy life (considering that really that’s what the main objective for most of the world)… I feel capitalism fails to meet that in that way. Maybe a hybrid of all systems could work better? If the world is becoming highly connected and integrated and the earth is acting more like one brain, maybe capitalism is like the red blood cells and what we need is the white cells to protect and help. Maybe not a replacement, but rather one overseeing it. Anyways, I think I may be going loopy cause I’m hungry. Lunch time.

@Arturo (sorry for originally saying Amy), I suppose now you’ve gotten to the root of it: How do you determine what is moral and immoral? I abhor the use of force to subordinate others to your ends. Capitalism says the exact opposite. It upholds your freedom to make the best decisions possible. This is why I think capitalism is in fact the only moral system of government.

I think you have an underlying assumption that selfishness = immorality, why? Selfishness does not equal my gain at another’s expense. An acknowledgement of the individual rights of all persons is a necessary component to my success and my ability to enjoy the fruit of my labor. Therefore it is in my selfish interest. Not because it is in the name of “the public good”, that is just a side effect, but because it is MY best interests.

The truly immoral notion is the one that says any person’s need holds a moral claim on another person’s product. By what right?

@Arturo, On the concept of charity=happiness. If this is truly what makes you happy then great, give all you can. It’s your right to do so, but only in a system where individual property rights are recognized is that even possible I might add.

What I take issue with is the notion that I’m obligated to give and until I give I won’t be happy. Maybe that is an overstatement of your point? Either way, it seems to be an underlying theme for you.

@Russ – It sounds like individual property rights is very important to you. Must be the same way I feel about human rights. At the same time, I hear you mention, now more than one occasion, how this pressure of “giving” may conflict with your current beliefs. I would feel the same as well if the world around me was telling me how I should do one thing or the other when I don’t think so. I stay open to the possibility that I may be wrong, and therefore, I’m constantly re-assessing. And that’s what led me to the belief that capitalism in itself, is more of a guide, and not a rule. I never bought in to the “American Dream” which to me = “consumerism”. Technically, I got financial independence by doing only 2 things to which at the time was hard, but now is not only easy, but I hold true to it. So when Erica is joyful of the way she is spending, I believe it’s just a moment of freedom she has discovered (read my original posts for more information). It will pass if she aspires for more. Just like when a youth gets their first car. They are not productive with it, they just ride around! Eventually though, you start using it for good. In my strict opinion, FI people who do not contribute back are a shameful waste of good resources. With so much time and opportunities on their hands, it’s somewhat gross to not see them aspire higher than themselves. And for those who are not FI, those who contribute more than your average FI person, are an elite class of people. Because it’s very easy to spend what you make all on yourself. Anyone can do that. FI or not.

@Arturo, I think our definitions of “good” and “productive” would differ greatly. I also don’t like the use of the phrase “contribute back” — implying their wealth was somehow a gift from someone else — give back to whom?

I also have a feeling that your definition of human rights would conflict with the concept of individual property rights? If a so called “right” contradicts another, one of the two cannot be so. What would you consider to be a human right?

I suppose I was not specific enough. In a socialistic society, EVERYONE is forced to participate and EVERYONE has access to social programs. In a capitalistic society, huge swaths of people pay little or nothing yet they are the ones who have access to social programs, while the people who pay in get – what?

@Honey, I apologize I mis-interpreted your gripe with capitalism. However, what your pointing out is not a component of capitalism, it is a byproduct of the hybrid system we have here in the states. As I said earlier, this isn’t capitalism, it’s a corruption of capitalism.

In a true capitalist system this situation wouldn’t exist. My comment about socialism still stands.

Edit: I’d also add that in a socialist system you still have the same issue. If people don’t hardly make anything, you can tax them 100%, but it still wouldn’t cover the cost of the benefits they are receiving. In short, socialism creates the problem you’ve pointed out. It doesn’t solve it.

@ Russ, #281 – I believe that any government’s purpose should be to guarantee a middle-class standard of living for every single one of its citizens. Perhaps I’m wrong and socialism wouldn’t do that, but I’m pretty sure that vision is also fundamentally incompatible with capitalism, which strikes me as anarchy except we all agree that money is awesome

@Honey, Anarchy is rule by brute force. The biggest gun wins. This is in direct contradiction to capitalism which at it’s core is based on upholding individual rights for all persons. Rights that can be objectively derived from the primacy of existence and the reality of the requirements of survival in the natural world.

This is getting quite a bit off topic and your comments on capitalism are so far off base that it’s difficult to have a discussion. We are talking about two completely different things.

Capitalism, philosophically, may be about upholding individual rights for all persons. I agree that one of the problems here in the US is that we have a blended/corrupted implementation of it, but it seems to me that if anarchy is “the biggest gun wins,” capitalism is “the most money wins,” and for the most part the individual loses out in both systems.

@Honey, I’m really not sure what you mean when you say “the most money wins”. Does someone else having money impede your ability to make a better life for yourself? Having money does not give you the ability to subordinate others to your ends (as with a gun).

Regarding your stated purpose of government: At whose expense is government to “guarantee a middle class standard of living for every single one of its citizens”? This is exactly the problem that you pointed out earlier. Who will provide the means to accomplish this standard of living?

I’ll have to leave it at that. If you haven’t gotten my point by now, I’m not sure what else I could say. It’s been fun.

The government is struggling to provide basic health care to all its citizens. While your goal is worthy, how it would be achieved is beyond me. I mean that literally, given the current state of the federal budget, I don’t know the process to get from that disparity, these 25% who can use some help, and the goal you suggest.

@ JoeTaxpayer, Since so many of our intellectual and physical abilities (or lack thereof) are determined by factors outside our control (genetics, socioeconomic status/access, freak accidents) then it seems like the only ethical setup for a society is (1) to provide everyone equal opportunity to maximize their abilities, and then (2) to pay everyone a middle-class wage, provided they are living up to those abilities.

I have no idea how something like that would be achieved, either. Eugenics, perhaps? Ha! KIDDING…I don’t think that’s a solution although it’s probably inevitable that some society will give it a go at some point!

@Russ – To me, wealth is classified as having enough or more than enough to survive. So giving back would be the next logical step if you have more than you need. Holding back would just be… greedy! Last time I checked, that was not a virtue. The Human Rights comment was just me trying to compare to how you felt about property rights. But the two should complement each other. Example: (Wiki) ”The Cochabamba protests of 2000, also known as the “Cochabamba Water Wars”, which were a series of protests that took place in Cochabamba, Bolivia’s third largest city, between January and April 2000, happened because of the privatization of the municipal water supply”. Property rights are not above Human Rights. Human Right to live is just one right. Water is a necessity of that without question. So here we find a conflict. Morality Is somewhat ambiguous with capitalism. So I won’t get into how if they wanted water under the capitalism rule, they should work for it, hence creating the economy needed to sustain and profit the company… um… I mean, the country. But with your comment to @Honey, it seems like you are not too concerned about morality. For someone who understand the psychology of morality knows that giving is crucial to remaining active in selflessness. In your other comment, I agree with you that having money does not impede someone else to have a better life IF there is enough for others. The problem is we live on a planet with limited, countable resources. With 10 million people on the planet, you can pretty much rest assured, there is enough for everyone. But with now 6.7B(ish) and counting, it will be hard to ignore that we are a global community that needs to take of each other. Because now we begin to see the effects where accumulation without repartitioning can hurt others.

@Honey – Haha, “everyone gives…but me.”. Good example as to why you need more than just the rules of economy to make a world worth living for everyone. It’s safe to say then that the tax system is more of a socialism invention.

If you are equating morality with selflessness, then your’re right I’m not concerned with that at all. But you’d be mistaken to do so. The question of what is moral and what isn’t is of utmost importance to me.

Let’s take your example of what is required for survival. Humans are a rational species. The mode of survival is thinking, planning, and executing. One’s ability to do this determines ones ability to sustain one’s own life. The results of execution are the products necessary for your survival (either directly or indirectly). In order to own your life, you must own the product of your labor. If you say that another person’s need overrides your right to your product, then you do not own your life — you’ll be forever indebted to every person that has had less success than yourself. Therefore, property rights are the essential human right. The right to life is not the same as the right to exist. Life requires sustained action and is not guaranteed to anyone.

You’ve picked a terrible example to prove your point (http://en.wikipedia.org/wiki/2000_Cochabamba_protests) The issue here should be obvious from the second sentence. What would expect from a country coming out of “decades of military dictatorships”. Now read the third sentence: “In 1985 with hyperinflation at an annual rate of twenty-five thousand percent, few foreign investors would do business in the country.” Gee, I wonder why. The water business wasn’t profitable for the government to run, and it wasn’t profitable for a private firm to run without raising rates.

At whose expense was it a right of the people to have running water? Even what we consider basic resources today take incredible amounts of work to reach their end consumers. Water must be purified, oil must be refined, coal must be burned, food must be grown/raised — this isn’t free! I’m sure I’ll get written off for this response, but you have to realize you can’t eat your cake and have it too.

I can’t believe how many commenters here believe that there’s an automatic entitlement every person should have to reap the benefits of someone else’s hard work as soon as some arbitrary threshold has been reached! Sharing and giving is one thing, but there are things far more valuable to give than money, which a lot of you seem to forget has a purely subjective value anyway.

Come on guys! On a blog like this, you should know that giving unearnt cash is not doing anybody a favour. There’s a reason success brings rewards, and there’s a reason others don’t enjoy those rewards – because they haven’t yet figured out their own path to success. Aren’t you robbing them by taking that climb and experience away from them? How many parents would think it was a good idea for all kids to automatically have jobs as soon as they finished school – regardless of whether that job was in a field they were good at, or enjoyed? Same thing.

Life is about experience. Not about money. Erica’s figured that out, so now she’s trading one for the other. There is nothing wrong with that, unless your particular jealous reaction forces you to find some philosophical point on which to argue she’s doing something she shouldn’t. Truth is, I don’t know anyone who wouldn’t love to be in her position in that respect, and buy chunks of their life back to do with as they choose. Wake up and get with the program, people! Not only is Erica freeing up her time with the fruits of her labours, she’s rewarding others’ labours, and even more, giving freely of what she’s learnt in the process by guest posting here!

If she was really a selfish, exploitative person, as some seem to imply, would we ever have heard from her?

Personally even getting a million bucks ($600k after taxes as pointed out by Troy), I wouldn’t have blown $50,000.

Yes, $600,000 is a lot of money.

Yes, $50,000 is a small percentage of that money.

But $50,000 in absolute terms, is a LOT OF FREAKING MONEY to me.

Note: This is coming from my personal perspective, and I used to earn (gross) $65,000/year and am now looking at bringing in about $200k/year working less than I did at $65,000 a year, and spending less.

Nevertheless, that was not the point of the post.

I think her point about outsourcing tasks you don’t want to do is a good point.

From my perspective, I don’t have anything I would outsource. Not even my taxes — I do the corp & my own taxes.

As for cleaning, we live in a small studio and it takes 3 hours a week, MAX.

We all just have different perspectives and I think if it makes her happy to not scrub anything — go for it.

@Russ – Your response is not written off. I can gladly answer it. You ask “give back to whom?”, if you must ask, then I probably am not explaining very well my perspective on this article. And you make it clear that you do not equate morality with selflessness. So either neither of those two matter to you, or I would like to hear on how you can be moral while being selfish. Your survival example is interesting. I agree with you, but I also add that animals don’t really think beyond survival mode. We do. We are more than just biological beings wanting to survive. I’m sure you can agree with me here. I believe that where we disagree is not on the details, but on principals like “If you say that another person’s need overrides your right to your product, then you do not own your life — you’ll be forever indebted to every person that has had less success than yourself.” In my view, I would hope so. How can I call it real success when it depends on taking advantage of others?
To respond to the water issue from wiki, I think that was a perfect example. Had people been selfless, there would not have been a campaign of fear and power against humanity. Instead, there would have been people looking at how to selflessly provide help to those who need it. And just because you have people looking at their own success rather than that of the people, you have not only those who are hurting a nation, but not doing anything who can. It is a right for the people to have water if others in that area have that and more. This is quite different than say a right to own a car, or a house… right to survival is for basic needs. Right to luxuries, not. That’s where capitalism comes and does a great job of motivating people. But also does a horrible job of protecting them from the greedy. You can have your cake and eat it if you are sharing.

@CrystalsQuest – Just a quick response on your comment “(Erica is ) giving freely of what she’s learnt in the process by guest posting here! “. it’s not very good advice, or lacking greatly in the article. I think that’s why these comments are here in the hundreds. I am in her “position”, financially free, and find it somewhat immature her response to her success. But I also know that those who chose to grow, will pass that phase. @FB says it pretty good. Even with my financial success, I cannot justify spending not only a chunk load with no purpose other than self pleasure, but to justify my high cost of maintenance as a human being and have others clean up after me.

@FB – Continuing from my response from @CrystalsQuest, I would like to further add to your comment: a person who has earned every dollar they have saved, spends every dollar in the manner they saved it. If one acquires money quickly, they spend it quickly. Erica herself admits she was in debt throughout her business, so it’s such an emotionally normal response to just spend when before you couldn’t. It’s obvious what she thinks is important in her life as I doubt few would argue that if you want to know where someone’s heart is, look at their money trail. I’m like you, FB, small sqft living and takes me only one hour to clean the place by myself. I do my own taxes but go to an accountant for the fancy stuff. That leaves me more money to help others with. I can’t say that my original intention of cleaning my own place and cooking for myself was because I liked it, but rather, it was to teach my son how to do it. Something I didn’t like, someone that I wasn’t good at… now like and am pretty good at. My son is learning and has a good grasp of it (he’s pretty young), but it was important to me that he grew with a normal spoon and for him to buy his own silver one, if you know what I mean. Because if not, you typically end up with someone who does not understand the value of hard work and could just end up spending like one who never really earned it.

@Arturo, Please, please, hear me on this: Selfishness does NOT equal exploitation, taking advantage, or sacrifice of others to yourself. Why do you say “How can I call it real success when it depends on taking advantage of others?” Where do you get that success depends on taking advantage? Who am I taking advantage of when I agree to work for X company at Y salary? Capitalism is built on the principal of engaging in contracts with mutual consent to mutual advantage. There is NO conflict of interest between rational persons. My success does not depend on others’ failure. Nor does the further success of others with more ability than myself. In fact I benefit from others who are able to do more and reach higher than I, without requiring that they give of their wealth to me.

You say: “I would like to hear on how you can be moral while being selfish.” A rational self-interest is completely moral. Are you saying that entering into an employment contract through which I gain the means to support myself and my family is immoral? I will grant you that it is also within your right to give your wealth away if you choose. Where the line is drawn is when you say it is immoral to keep the fruit of your labor and that you must give it away. That is plain theft, and it can only be enforced with a gun.

Let me respond to this: “We are more than just biological beings wanting to survive. I’m sure you can agree with me here” I disagree completely. The primary distinguishing trait of the human species is that we are a rational, volitional species, and we are such because of our biology, nothing more. When you say we more than this, what are you referring to?

You also say: “It is a right for the people to have water if others in that area have that and more.” Bull. Running water is a service that requires significant work to provide. You’re only entitled to it if you can afford to pay those providing it. I heard no answer to this question: At who’s expense is it a right of the people to have running water? And what is your recourse if no one volunteers to provide this service? The answer is: a gun to force them — now you tell me which is the immoral notion.

There are so few resources about what to do lifestyle-wise once money is not a major issue. I was in a similar situation a few years back, and there was just so little on the internet about it. Plenty of “How to get rich” and “How to invest so you can keep being rich”, but pitifully rare amounts of “I’m rich, now what?”

I filled the first year or so by signing up for a whole lot of adult education courses in areas I was interested in, some health/fitness improvements to counter the stress I’d been under to that point, and general relaxation after fifteen years at the grindstone.

If the GFC hadn’t put me back in the office, I would have followed up with looking into doing university degrees, pursuing research in areas I loved, getting a couple of back-of-the-envelope ideas followed up on, hitting a couple of interesting conventions around the world, and looking into low-level philanthropy.

One thing I remember with great clarity from that time is that for about three months, I woke up grinning from ear to ear with the thought that it was entirely possible I’d never have to work another day in my life – and if I chose to work somewhere, I could walk away at any time. It was a real buzz.

As a bonus, even though I was invested badly and got mostly wiped out by the GFC (c’est la vie), I’d had the calm, reflective time off needed to decide what I really wanted to do with myself as a career. I absolutely love what I’m doing now and wouldn’t change it for the world – I might even keep doing it if I get to my personal cash-out point again, it’s so much fun.

Glad to hear you didn’t fall into the depression trap. Keep on truckin’!

@Russ – I appreciate your long response. It sounds like you put some thought behind what has been discussed here. Although I appreciate the extent of your effort to help me understand, you do not need to ask repeatedly rhetorical questions. Moreover, even of questions to attempt to disprove or convince me otherwise of my own ideas. When I share, I stay open to the idea that I could be wrong or I could improve on what I already practice. It’s a huge factor in where I am, where I am today. It’s good that you ask questions. So ask to enlighten with open questions. I believe you will have more success than if you try to lead to a closed answer. It forces an answer that even if people are wrong, they will stick to it just because you hurt their pride and respect. Your examples are good. Your questions are fair. I think they are trying to defend an area to which I am not questioning. This is mostly because of the gun example. I think the extreme you are thinking of is on a borderline of living in agreed peace, yet near chaos. Maybe it’s the environment I grew up and chose to live in, but the questions I ask is to assess a much more difficult question, the ones which I have seen many avoid and even plainly deny. The question may even be more spiritual than your current understanding. So let that not sway you from trying to understand. I think it would be futile to answer each of your questions unless you think it is important. But I see it come down to one thing…you live in a world where your decisions (or indecisions) affect others. However, your decisions and actions does not need an over-analysis of what ‘may’ happen. But if you assess your goal with each one, you can decide against a ruler (to which this may be the actual reason these blog comments keep going on and on to discover how each one has a different one). Selfishness = “It is the act of placing one’s own needs or desires above the needs or desires of others.” That’s the definition I’m working with. To clarify one last time, I’m not debating capitalism (like I said before, it is a great motivator, poor ruler)…. what I am saying is simply: I not only disagree but highly recommend against doing what Erica did. I am glad to say this advice does not come from experience. I am, however, recommending you do, seek advice from more than one financially independent person and get their input. This, I can say, I am glad I am advising through experience. My hope is that there are more properly aspired people, then not. Thought for the day: Why are most people not financially independent right now?

@Arturo, I used to be an altruist. I am no stranger to changing my point of view. What made me change was the realization that my morality was based on nothing more than a feeling and could not be backed up objectively.

I’m sorry that my use of the rhetorical device does not suit you. Though the questions weren’t intended to be overtly rhetorical. The fact that you find them as such suggests that you have some contradiction between the obvious answers and what you would like to say. You cannot say that is moral to work towards a better life for yourself, while at the same time say that it is immoral to keep your wealth beyond some arbitrary point of a “middle class standard of living”. If you have answers and can show me where I’ve gone wrong I’d love to hear them.

What I’m trying to point out is that altruism as a moral law has the use of force as it’s only means of implementation (the gun metaphor). If it arises organically then its practice is morally permissible — I have no grounds to prevent you from giving, but for you to call me immoral for not participating is baseless and unenforceable. Notice here that my view does not violate any fundamental rights of yours, but that yours violates my fundamental right to the fruit of my own labor, and therefore my right to my own life.

As to your definition of selfishness: “It is the act of placing one’s own needs or desires above the needs or desires of others.” I have no issue with this as stated, but it’s incomplete. Your working definition includes the idea that my interests are in direct conflict with yours, and therefore me looking out for me means you get exploited. This is fallacious except in the extreme scenario where natural resources are so scarce that a population is not sustainable. This hypothetical isn’t even worth discussing — it is an apocalyptic scenario.

I recognize the world as a benevolent universe. After all we evolved to live in the exact world in which we are living. There is no reason to believe the cards are stacked against us. To base your morality on the exceptions to this seems to me a poor starting place and a depressing way to view the world. All that is required of you is that you love your own life enough to work to sustain it. If you cannot do that I would find the idea of sympathy towards you utterly repulsive. If you can do that, you require no sympathy.

…sorry for the length. I’m sure I’m boring most everyone else to death by now.

@Russ, if I did not have a boyfriend I would demand your email address I think your clarification is awesome.

For me, your line of thinking is one of the reasons that I am opposed to private/faith-based charity work. If something’s a “right,” then everyone should have access to it and everyone should also subsidize their access appropriately.

The problems with private/faith-based charity work are that a) by endorsing this type of giving we’re admitting that not everyone has access to what’s being given, in which case the problem is with the setup of the society and not the individual, and/or b) we’re giving a certain class of person for free something that others have to pay for, and/or c) what’s being given is not, in fact, a “right” and is instead preferential treatment of the people receiving it. None of these are moral solutions for me.

This is NOT to say that I believe that our society is perfectly just. There are horrendous injustices going on around the world all the time, and I think many of them are imperative and need to be rectified. I just think that if we classify something as a right, then the government should be the one providing access to it. If it’s not a right, then why are there organizations providing it to some people free of charge while others have to pay?

I don’t want to live in a society that’s comfortable with shifting the cost burden of basic rights to external bodies. I want to live in a society that’s motivated to take legislative action to maximize the productivity and happines of all its citizens. Charity seems to be based in a zero-sum fallacy, when in actuality there are lots of circumstances in which more for everyone improves things for everyone.

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